What is Recruitment Process Outsourcing?
RPO stands for Recruitment Process Outsourcing, the management and delivery of recruitment services to an organisation by a professional recruitment third party provider. Or, more simply put, someone else does your recruitment for you.
There are plenty of benefits to RPO; you have a single point of contact for all recruitment issues, you gain the benefit of their often extensive and varied best-practice experience and, since they are professionals, they can often offer the services cheaper and more efficiently than an in-house team, leaving you free to focus on your own expertise.
But often it’s not so simple, because all RPO is not the same. Many recruitment companies advertise RPO services and solutions, but actually offer very different levels of professionalism and solution. So what might RPO look like, from the simplest to the most comprehensive? What are the pros and the cons of each?
The simplest way to categorise RPO is to look at how they source candidates, and what services they provide in managing the process:
Description: The RPO firm sources candidates from a pool of third party agencies. Some may provide a preliminary sifting of the CVs, some don’t. They use the systems and processes already in place.
Pros: Saves having to deal with agencies. Probably costs no more since the RPO company often makes their money on the margin. Very quick to install.
Cons: Only has access to the CVs agencies have, which is typically a very limited pool, on average only c.1-2% of the qualified candidates for the role.
Description: The RPO firm sources candidates by running adverts, either online or in traditional media. They may provide preliminary sifting. They use the systems and processes already in place.
Pros: Saves writing adverts and managing the various providers, selecting the appropriate media etc. Often cheaper than using a typical agency provider. Very quick to install.
Cons: Very limited pool of candidates, as they only have access to those who are currently active who see that advert and are attracted by it, typically circa, ½ % of suitable talent. Agencies will also be sending the same candidates to other, competitor, companies.
Description: The RPO provider, often a large agency, has a substantial database of candidates already and gives preferential rates in return for having first refusal to provide candidates. If they cannot fill the role they will typically manage the process of going to other suppliers or advertising, as above. Also uses existing client systems.
Pros: Saves having to deal with agencies. Very quick to install.
Cons: In many ways the worst of all worlds. You still only have access to the CVs the agencies have, in fact it is only a sub-set of it, reducing likely quality due to the smaller pool, and the supplier is almost always concurrently offering these candidates to other, competitor organisations. At the same time by favouring one agency you alienate other suppliers. You still have no added value.
Description: Instead of relying on ‘passive’ sources, such as databases and adverts, the supplier uses networking, research and headhunting methods to identify, map and contact potential candidates.
Pros: Brings to the table candidates who are not otherwise looking. Maximises the pool of potential candidates. Accesses the best people. Less competition for the candidates. Allows the development of specific and effective talent pools.
Cons: Because candidates are not actively looking it can take time. The amount of time and cost required means that the RPO supplier will likely look for a high level of commitment, or increased costs.
Of course solutions can encompass more than one of these, but don’t assume that they do.
Description: The RPO provider only provides sourcing, drawn from the list above. The process is entirely provided by the client and the RPO provider fits to it.
Pros: It is easy and quick to apply as nothing changes.
Cons: Because nothing changes there is no opportunity to take advantage of the experience of the RPO provider. If they have little experience this is no loss, but many professional RPO firms have best practice experience of hundreds of firms. No added value.
Description: Instead of using the client processes, the recruitment element is handed wholly over to the RPO provider. The vacancy is sent to them and all review, sourcing, assessment etc is managed by the supplier using their processes, with a shortlist of candidates being provided for selection.
Pros: Limited disruption to the client, since recruitment essentially takes place outside of their processes. Quick to set up and engage.
Cons: Typically has low visibility, with poor KPIs and metrics. It also makes recruitment a ‘black art’ which occurs outside of the business. If and when the relationship with the RPO provider ends all process and expertise is lost.
Managed Solution - Fixed
Description: The RPO provider implements a ‘black box’ solution, tried and tested in previous implementations which covers every element of the recruitment process. A team is provided to deliver it who are familiar with it.
Pros: Comprehensive, proven and with multiple reference points. The team are simply repeating what has been done before, reducing risk. Allows relatively rapid implementation. Produces comprehensive KPIs and metrics.
Cons: Is a single solution, regardless of the differences between client industries and cultures. Often tied to a specific ATS (Applicant Tracking System) which can be a significant additional cost and not be ideally suited to the client. It can also be inflexible and due to this means that the client can feel like they have lost control.
Managed Solution - Bespoke
Description: The RPO provider takes a list of requirements and designs and develops a tailored recruitment solution for the client. This covers as many stages, from specification to on-boarding, as the client requires. It is tailored to the client’s needs, strengths and goals. Where elements of the existing client process work well they are typically retained.
Pros: Comprehensive, tried and tested, built on best practice experience. Culturally sympathetic, it causes less disruption and less occurrence of feeling ‘out of step’ with the client culture. Flexible, if needs change it can change. Produces comprehensive and client specific KPIs and metrics.
Cons: Requires a period of initial assessment or a process audit to ascertain what is there and what the client needs before the solution is designed. This can take time, typically 1-2 months.
Description: The RPO provider not only provides a Managed Solution, typically bespoke, as above, but also becomes a true partner, working with the client to strategically identify goals and deliver recruitment and talent solutions. This typically includes future workforce planning, talent warehousing, management assessment, training and sometimes even looking at ways to make recruitment a profit centre.
Pros: Focuses on the long term strategic goals of the company. Delivers the highest quality solutions. Highly responsive to client needs and changes. Delivers not only candidates but bottom line benefits. Complete client visibility and control, through partnership. Maximum added value.
Cons: It takes time to design and develop the solution, and even more time to build the partnership. It can take up to six months to reach the level of trust and rapport required to get the most from the partnership.
Whilst each of these Process Management methods could in theory be used with any of the Sourcing methods, it is more likely that the higher up the Process chain the solution climbs the higher up the Sourcing chain they will also go. This is simply because in providing a sophisticated solution or partnership there comes a point where it is essential to provide the widest and best pool of candidates possible, and this will invariably require a comprehensive proactive sourcing solution.
Is it for me?
The final question is typically whether it is suitable for a specific client. The answer is, probably yes, with the right partner.
RPO solutions have been delivered very successfully in every industry, in every market, at every level and for all sizes of organisation, private and public sector. From growing SME with little or no HR process, to huge multinationals with an established processes and large delivery team, RPO solutions have been delivered which have brought value and efficiency to the client.